Schupp v. Ohio Dept. of Ins.

[Cite as Schupp v. Ohio Dept. of Ins., 2021-Ohio-4440.]
JASON M. SCHUPP Case No. 2021-00199PQ
Requester Judge Patrick E. Sheeran
v. DECISION AND ENTRY
OHIO DEPARTMENT OF INSURANCE
Respondent
{¶1} Respondent Ohio Department of Insurance (ODI) objects to a Special
Master’s Report and Recommendation in this public-records case. The Court sustains,
in part, ODH’s objections for reasons set forth below, but adopts the overall
Recommendation made by the Special Master.
I. Background
{¶2} On April 14, 2021, Requester Jason M. Schupp brought a complaint against
ODI, alleging that he had been denied access to public records in violation of R.C.
149.43(B). Schupp asserted in the complaint:
I filed a request on March 26, 2021 asking for “licensing or
authorization documentation with regard to Ohio domiciled captive
insurance companies on file with the Ohio Department of Insurance.” The
Department denied the request citing the confidentiality provisions of Sec.
3964.03(H). However, this statute only applies to document submitted by
the licensee. The confidentiality provisions of Sec. 3964.03(H) do not
apply to the document representing the license issued by the Department.
The requestor pointed this out the misreading of the statute to the
Commissioner with no response.
Case No. 2021-00199PQ -2- DECISION & ENTRY
(Complaint.) In an exhibit attached to the complaint, Schupp informed ODI, “I am
looking for a list of the names and ideally addresses of the captives licensed by the
Department.”
{¶3} The Clerk of this Court appointed a Special Master who referred the case to
mediation. After mediation failed to successfully resolve all disputed issues between
the parties, the case was returned to the Special Master’s docket. ODI filed a combined
response and motion to dismiss in which ODI sought dismissal of Schupp’s complaint.
{¶4} On October 4, 2021, the Special Master issued a Report and
Recommendation (R&R). The Special Master noted in the R&R that, on June 7, 2021,
ODI provided Schupp with copies of six captive licenses issued to captive insurance
companies, with the company names redacted. (R&R, 1-2). The Special Master has
recommended denying ODI’s motion to dismiss. (R&R, 3.) The Special Master
concluded in the R&R: “Upon consideration of the pleadings, affidavit, and attachments,
the special master recommends the court order respondent to disclose copies of the six
Captive Licenses with the business names of the licensees unredacted. It is
recommended that costs be assessed to respondent.” (R&R, 12.)
{¶5} On October 18, 2021, ODI filed written objections to the Special Master’s
R&R. In a certificate of service accompanying the objections, ODI’s counsel certified
that a copy of the objections was directed to be sent to all parties “via the court's e-filing
system, and also emailed to the Requestor.” On October 18, 2021, ODI also filed a
Notice of Service in which ODI’s counsel certified that a copy of the objections was
served on Schupp “via certified mail.”
{¶6} On October 21, 2021, proceeding as a self-represented litigant, Schupp filed
a response to ODI’s written objections. In a certificate of service accompanying the
response, Schupp certifies that he served a copy of his response to ODI’s counsel by
means of certified mail and email.
Case No. 2021-00199PQ -3- DECISION & ENTRY
II. Law and Analysis
{¶7} R.C. 2743.75(F)(2) governs objections to a special master’s report and
recommendation. Pursuant to R.C. 2743.75(F)(2), either party “may object to the report
and recommendation within seven business days after receiving the report and
recommendation by filing a written objection with the clerk and sending a copy to the
other party by certified mail, return receipt requested. * * * If either party timely objects,
the other party may file with the clerk a response within seven business days after
receiving the objection and send a copy of the response to the objecting party by
certified mail, return receipt requested. The court, within seven business days after the
response to the objection is filed, shall issue a final order that adopts, modifies, or
rejects the report and recommendation.”
A. ODI contends that the Special Master incorrectly interpreted, and
incorrectly applied, R.C. 3964.03(H) and 3964.08. Schupp disputes ODI’s
contentions.
{¶8} In the R&R, the Special Master stated, “The question of when an entity is a
CIC [captive insurance company] for purposes of R.C. 3964.03(H) is arguably made
ambiguous by other language in the statute.” (R&R, 5.) The Special Master found “that
a corporation is not ‘a captive insurance company’ within the meaning of R.C.
3964.03(H) until it is licensed to operate as such.” (R&R, 6.) The Special Master
reasoned, “ODI thus fails to meet its burden to prove that the business names on the
Captive Licenses fall squarely under R.C. 3964.03(H).” (R&R, 6.) And the Special
Master “conclude[d] that ODI has not met its burden to prove that the claimed
exemptions prohibit disclosure of CIC business names in the Captive Licenses
authorizing their operation in this state.” (R&R, 12.)
{¶9} ODI asks the Court to reject the Special Master’s conclusions and issue a
ruling in its favor. (Objections, 7.) ODI maintains that the Report and Recommendation
“incorrectly holds that the confidentiality provisions in R.C. 3964.03(H) and R.C.
3964.08 do not apply, despite plain language to the contrary.” (Objections, 1.)
Case No. 2021-00199PQ -4- DECISION & ENTRY
{¶10} In response, Schupp contends, “We need not worry whether the Report
and Recommendation reads in the word ‘licensed’ or the ODI reads in the word
‘applicant’. The Legislature conveniently defined the term ‘captive insurance company’
in R.C. 3964.01 (B) as ‘any insurer that insures only the risks of its parent or affiliated
companies of its parent.’ So, a captive insurance company is an ‘insurer’ that actually
insures something - a state of being that requires a license.” (Footnote omitted.)
(Response, 2.)
{¶11} ODI’s objections, and Schupp’s response, raise issues of statutory
interpretation. Statutory interpretation presents a question of law for a court’s
determination. See City of Independence v. Office of the Cuyahoga Cty. Executive, 142
Ohio St.3d 125, 2014-Ohio-4650, 28 N.E.3d 1182, ¶ 18. The Ohio Supreme Court has
stated, “The necessity of considering the facts or the evidence to determine whether a
legislative act applies to a particular case does not turn the issue
of statutory interpretation into a question of fact.” City of Independence at ¶ 18, citing
Henley v. City of Youngstown Bd. of Zoning Appeals, 90 Ohio St.3d 142, 148, 735
N.E.2d 433 (2000). Regarding statutory interpretation, the Ohio Supreme Court has
held,
The object of judicial investigation in the construction of a statute is
to ascertain and give effect to the intent of the law-making body which
enacted it. And where its provisions are ambiguous, and its meaning
doubtful, the history of legislation on the subject, and the consequences of
a literal interpretation of the language may be considered; punctuation
may be changed or disregarded; words transposed, or those necessary to
a clear understanding and, as shown by the context manifestly intended,
inserted.
But the intent of the law-makers is to be sought first of all in the
language employed, and if the words be free from ambiguity and doubt,
and express plainly, clearly and distinctly, the sense of the law-making
Case No. 2021-00199PQ -5- DECISION & ENTRY
body, there is no occasion to resort to other means of interpretation. The
question is not what did the general assembly intend to enact, but what is
the meaning of that which it did enact. That body should be held to mean
what it has plainly expressed, and hence no room is left for construction.
(Emphasis added.) Slingluff v. Weaver, 66 Ohio St. 621, 64 N.E. 574 (1902),
paragraphs one and two of the syllabus. See State v. Porterfield, 106 Ohio St.3d 5,
2005-Ohio-3095, 829 N.E.2d 690, ¶ 11 (“[w]hen confronted with allegations of
ambiguity, a court is to objectively and thoroughly examine the writing to attempt to
ascertain its meaning. * * * Only when a definitive meaning proves elusive should rules
for construing ambiguous language be employed. Otherwise, allegations of ambiguity
become self-fulfilling”). See also Gabbard v. Madison Local School Dist. Bd. of Edn.,
2021-Ohio-2067, ¶ 22 (Ohio Supreme Court precedent “requires courts to read
a statute as a whole and to not dissociate words and phrases from that context”);
Gabbard at ¶ 13 (when statutory language is unambiguous, a court is required to apply
it without resorting to rules of statutory interpretation or considerations of public policy; a
court’s review “‘starts and stops’ with the unambiguous statutory language”).
A. R.C. 3964.03(H) concerns the organization and applications for licensure
of captive insurance companies.
{¶12} R.C. Chapter 3964 concerns captive insurance companies. As used in
R.C. Chapter 3964, a “captive insurance company” “means any insurer that insures only
the risks of its parent or affiliated companies of its parent. ‘Captive insurance company’
includes any protected cell captive insurance company formed or licensed under the
provisions of this chapter.” R.C. 3964.01(B).
{¶13} R.C. 3964.03(H) governs the organization and applications for licensure of
captive insurance companies. R.C. 3964.03(H) provides:
Except as otherwise provided in this division, documents and
information submitted by a captive insurance company pursuant to this
section are not subject to section 149.43 of the Revised Code, and are
Case No. 2021-00199PQ -6- DECISION & ENTRY
confidential, and may not be disclosed by the superintendent or any
employee of the department of insurance without the written consent of
the company.
(1) Such documents and information may be discoverable in a civil action
in which the captive insurance company filing the material is a party upon
a finding by a court of competent jurisdiction that the information sought is
relevant and necessary to the case and the information sought is
unavailable from other, nonconfidential sources.
(2) The superintendent may, at the superintendent’s sole discretion, share
documents required under this section with the chief deputy rehabilitator,
the chief deputy liquidator, other deputy rehabilitators and liquidators, and
any other person employed by, or acting on behalf of the superintendent
pursuant to Chapter 3901. or 3903. of the Revised Code, with other local,
state, federal, and international regulatory and law enforcement agencies,
with local, state, and federal prosecutors, and with the national association
of insurance commissioners and its affiliates and subsidiaries provided
that the recipient agrees to maintain the confidential or privileged status of
the documents and has authority to do so.
(Emphasis added.)
{¶14} When R.C. 3964.03(H) is read as a whole, R.C. 3964.03(H) is not
ambiguous. Under R.C. 3964.03(H), except as otherwise provided in division (H),
“documents and information submitted by a captive insurance company” pursuant to
R.C. 3964.03 “are not subject to [R.C. 149.43], and are confidential, and may not be
disclosed by the superintendent or any employee of the department of insurance
without the written consent of the company.” Thus, R.C. 3964.03(H) does not apply to
documents and information that are not submitted by a captive insurance company.
Moreover, under the plain language of R.C. 3964.03(H), a captive insurance company
does not need to be licensed for the provisions contained in R.C. 3964.03(H) to apply.
Case No. 2021-00199PQ -7- DECISION & ENTRY
See R.C. 3964.01(B) (defining “captive insurance company,” as used in R.C. Chapter
3964).
{¶15} Accordingly, in this instance, under R.C. 3964.03(H) documents which are
the subject of Schupp’s request and which are not submitted by a captive insurance
company are clearly subject to R.C. 149.43; such documents are not confidential; and
therefore such documents may be disclosed by the superintendent or any employee of
ODI without the written consent of the captive insurance company.
{¶16} Notably, in the R&R, the Special Master states, “It is not apparent from the
record that information and documents submitted by CICs are the sole source of their
business names.” (R&R, 11.) This Court agrees. Thus, in view of the Special Master’s
finding, ODI has not sustained its burden to show that R.C. 3964.03(H) prohibits
disclosure, because ODI has failed to demonstrate that the requested records—the
name of the company and its business address—fall squarely within R.C. 3964.03(H)’s
exemption for disclosure. See Welsh-Huggins v. Jefferson Cty. Prosecutor’s Office, 163
Ohio St.3d 337, 2020-Ohio-5371, 170 N.E.3d 768, ¶ 35 (“[i]f the public office or person
responsible for public records refuses to release the requested record on the basis of a
statutory exemption, its ‘burden of production’ in the R.C. 2743.75 proceeding is to
plead and prove facts establishing that the requested record falls squarely within the
exemption”).
B. R.C. 3964.08 pertains to the concerns examination, evaluation, and
monitoring of captive insurance companies.
{¶17} R.C. 3964.08 concerns examination, evaluation, and monitoring of captive
insurance companies. R.C. 3964.08 provides:
(A) Captive insurance companies shall be examined, evaluated,
and monitored pursuant to section 3901.07 of the Revised Code.
(B) All examination reports, preliminary examination reports or
results, working papers, recorded information, documents and copies
thereof produced by, obtained by, or disclosed to the superintendent or
Case No. 2021-00199PQ -8- DECISION & ENTRY
any other person in the course of an examination made under this section
are confidential and are not subject to subpoena and may not be made
public by the superintendent or an employee or agent of the
superintendent without the written consent of the company, except to the
extent provided in this section. However, nothing in this section shall
prevent the superintendent from using such information in the furtherance
of the superintendent’s regulatory authority under this chapter.
(C) The superintendent may, in the superintendent’s sole
discretion, share documents that are the subject of this section with the
chief deputy rehabilitator, the chief deputy liquidator, other deputy
rehabilitators and liquidators, and any other person employed by, or acting
on behalf of, the superintendent pursuant to Chapter 3901. or 3903. of the
Revised Code, with other local, state, federal, and international regulatory
and law enforcement agencies, with local, state, and federal prosecutors,
and with the national association of insurance commissioners and its
affiliates and subsidiaries provided that the recipient agrees to maintain
the confidential or privileged status of the confidential or privileged work
paper and has authority to do so.
{¶18} When R.C. 3964.08 is read as a whole, R.C. 3964.08 pertains to captive
insurance companies—not just licensed captive insurance companies. See
R.C.3964.08(A); see also R.C. 3964.01(B) (defining “captive insurance company,” as
used in R.C. Chapter 3964).
{¶19} In this instance, however, as Schupp is not seeking documents referenced
in R.C. 3964.08(B), R.C. 3964.08’s prohibitions against disclosure are inapposite under
his request, and the facts, of this case.
III. Conclusion
{¶20} For reasons set forth above, the Court modifies the Report and
Recommendation, and sustains, in part, ODI’s objections. The Court denies ODI’s
Case No. 2021-00199PQ -9- DECISION & ENTRY
Motion to Dismiss. The Court orders ODI to forthwith disclose copies of the six Captive
Licenses referenced in the Report and Recommendation without redaction of the
business names of the licensees. Schupp is entitled to recover from ODI the amount of
the filing fee of twenty-five dollars and any other costs associated with the action that
are incurred by Schupp, but Schupp is not entitled to recover attorney fees. Court costs
are assessed to ODI. The clerk shall serve upon all parties notice of this judgment and
its date of entry upon the journal.
PATRICK E. SHEERAN
Judge
Filed November 1, 2021
Sent to S.C. Reporter 12/17/21